SSP Group Q4 Update: Announces £100m Buyback

SSP Group (LON: SSPG) has released a Q4 trading update, affirming it's on track to deliver full-year earnings per share (EPS) in line with market expectations.

Amidst a backdrop of moderating passenger growth, the company also announced a £100 million share buyback program, signaling confidence in its financial health and future prospects.

SSP Group's FY25 revenue is expected to reach approximately £3.7 billion, representing an 8% year-over-year increase on a constant currency basis.

Operating profit is projected at around £230 million, an 11% increase year-over-year, with an operating margin of approximately 6.2%, up 20 basis points.

At actual exchange rates, the company anticipates FY25 EPS of approximately 11.5p, a 15% year-on-year increase, benefiting from a lower-than-expected effective tax rate and interest charge.

On a constant currency basis, FY25 EPS is expected to be around 12.3p, aligning with the middle of the previously planned range.

Leverage, measured as Net Debt/EBITDA, is expected to decrease from 2.2x at the half year to approximately 1.6x at year-end, driven by robust free cash flow generation, planned lower capital expenditure, and improved working capital performance.

The company anticipates its FY Group ROCE (Return on Capital Employed) to strengthen from last year's 17.7% (pre-tax).

Q4 revenue growth stood at approximately 4% year-on-year on a constant currency basis. This growth was fueled by strong performance in Asia Pacific, EEME (Eastern Europe, Middle East & Africa), North America, and the UK, offsetting lower sales in Continental Europe.

Driver Breakdown:

• Regional Performance: Strong growth in the UK and Asia Pacific & EEME regions offset challenges in Continental Europe.
• Cost Efficiency: Focus on cost control and efficiency improvements contributed to operating profit growth.
• Cash Flow Generation: Strong cash flow allowed for debt reduction and the initiation of a share buyback.

SSP Group CEO Patrick Coveney commented: “We have delivered a resilient Q4 performance against an unsettled macro-economic and softer demand environment in some of our key travel markets… facilitated by our strong cash generation in the second half and given our confidence in the outlook for next year, we are pleased to be announcing a £100m share buyback programme today.”

Despite overall positive results, SSP Group acknowledges the need for accelerated performance improvements in its French and German businesses.

The company is actively implementing initiatives to address these challenges and expects to see improved profitability in Continental Europe in FY26.

SSP Group expects total capital expenditure in FY26 to be less than £200 million, with growth capex consistent with an expected level of net gains (excluding MSA site exits) in the year of approximately 2%. The company's next full-year results announcement is scheduled for December 4, 2025.